Can I correct the date of a rollover to Roth IRA on the 1099-R
I initiated a 2017 rollover into a Roth IRA on December 29, 2017. Fidelity had a glitch which delayed processing until January 2, 2018. Fidelity will generate a 1099-R for tax year 2018.
This has negative tax consequences, because I will be in a much higher tax bracket in 2018 than in 2017. Is it possible to correct or modify the 1099-R or somehow petition the IRS to re-classify this as a 2017 tax event?
Permalink Submitted by Edward Bullister on Mon, 2018-03-26 20:34
hence the need to pay taxes.
Permalink Submitted by Alan - IRA critic on Mon, 2018-03-26 23:36
12/29 was the final business day of the year, and conversions requested that day or even the day before have a good chance of not being processed and likely plenty of them are not. If you thought you had a good enough case, you could report the conversion on your 2017 return with an explanatory statement and copy of the transaction statement showing the Jan date. Good chance the IRS will reject this and then you would have to file an amended return. If the IRS approves it (likely by not ever contacting you), then you will have to again convince them next year when the 1099R is issued that you already reported the income in 2017.
Permalink Submitted by Edward Bullister on Tue, 2018-03-27 01:59
Thanks, Alan-iracritic. I might try that. Do you have a guess as to whether that would be successful? More than 50-50?
Permalink Submitted by Alan - IRA critic on Tue, 2018-03-27 02:07
I have no idea, but if forced into a wild guess, I would say perhaps less than a 1 in 4 chance. And that factors in any tendency of the IRS to accept tax money in hand. You are aware that all of the marginal rates except the 10% bracket are reduced for 2018, correct?
Permalink Submitted by Edward Bullister on Wed, 2018-03-28 12:47
Yes, lowered tax rates understood. Took a hiatus from salary in 2017 to start a company. I only thought of the Roth Conversion on Dec. 28th. Need to plan ahead more next time.